If you’re looking to buy a home but you don’t have enough funds to cover the earnest money deposit, then you should take a step back and seriously evaluate whether it makes sense for you to buying a home and taking on a mortgage.
Here are a few situations where this might occur, and what you might want to do in that situation.
You have assets but no liquidity
Perhaps you actually have a good amount of assets, but due to the illiquid nature of those assets you don’t happen to have a lot of cash, i.e. short-term liquidity.
In this situation, you have to evaluate whether you’re able to get a loan against your short-term assets and whether the terms of any such loan are acceptable to you. You should consult with your financial and tax adviser to see if it makes sense for you to get an asset based loan to cover perhaps not only your earnest money deposit, but your entire purchase price.
If you do end up getting a loan against your illiquid assets to fund your earnest money deposit, you should think seriously about how you plan to fund not just the balance of the purchase price, but housing related payments post-closing too.
You plan on receiving a gift from family
Perhaps the reason you don’t have money for an earnest money deposit is because you were planning on receiving a cash gift from your family to help with the purchase.